Trade Associations Are Shrinking With Economy

Trade associations are shrinking with the recession after decades of being one of the Washington area's strongest and fastest-growing business sectors and the city's third-largest employer.

As industries throughout the country--auto, steel, housing, energy--have been hard-hit by the poor economy, their troubles have been mirrored in the operations of their umbrella organizations, many with headquarters in the District.

Associations have cut staff dramatically, eliminated programs, delayed or canceled conferences, cut back on publications and travel, and in some cases moved to the suburbs, where leases and land are cheaper and where some local governments have offered financial incentives to attract them.

"Most of these trade associations are pulling in their horns," said Duane Ekedahl, vice president and manager for Smith Bucklin and Associates in the Washington area, which manages 75 associations. "There aren't very many hiring today."

New figures from the Washington Metropolitan Council of Governments show that the decline in association employment here began in the late 1970s.

The council conducts a census of employment every four years, and the latest figures show that employment in trade and professional associations in the Washington metropolitan area declined by 17 percent, or close to 7,000 people, between 1976 and 1980, the latest year for which statistics are available.

Some examples of recent cutbacks are these:

* The Oil Jobbers Council has cut its Washington staff in half in the past two years, from 32 employes to 16. The oil glut and energy conservation efforts combined to cut sharply into the business of the independent petroleum marketers represented by the council.

"It was pretty brutal," said David Morehead of the council. The group also turned its publication over to an outside firm to save money and reduce travel, he said.

* The American Mining Congress dropped 91 employes, leaving the group with a staff of 76. The D.C.-based organization also canceled its annual reception this year, a party it traditionally holds for about 1,000 people, including senators, congressman and other officials, at the Capital Hilton about this time of year.

* The National Association of Realtors, which claims the largest membership of any association, cut its staff 12 percent, from a peak of 609 two years ago to 534 now. The bulk of the staff is in Chicago, where the group's headquarters is located, but the association has a large contingent in Washington as well.

The staff reductions correspond to a drop in membership from a peak of 762,000 in 1979 to 614,000 now, a result of the longest and deepest housing slump since World War II, and further membership declines are expected this year.

* Homebuilders suffered the same fate, and 29 employes were laid off at the National Association of Home Builders here last fall, leaving total staff at 184. Membership had been dropping for several years, but until last fall the group had been able to reduce staff by attrition.

"There was not a lot of human suffering until then. But those were real human beings out of jobs," said David Stahl, the association's executive vice president. "That hurt because they were people who were doing their job well."

In addition to the layoffs, he said, the 16 association employes who made more than $50,000 a year took a 5 percent pay cut in October.

* The National Forest Products Association, also with its headquarters in the District, laid off 25 people last summer, a cut of about a quarter of the staff, as the devastated housing market left few buyers for the makers of lumber and plywood. Salaries have been frozen, travel cut back and a publication deferred, a spokesman said.

* The National Association of Social Workers has only cut one part-time person, largely because the staff is unionized, according to association spokeswoman Ghita Levine, but has frozen other positions so they are not filled when a staff member leaves.

The loss of federal government contracts forced large budget cuts that severely hampered the group's activities, said Levine. To save on lease costs, the organization moved from the District to Silver Spring last summer, and the distance has made the group's advocacy efforts more difficult, Levine said. The organization also has restricted travel, and programs are to be cut drastically.

"We have made a lot of severe cuts and there are a lot more coming," Levine said. "We're really putting a brake on things."

* The U.S. Chamber of Commerce eliminated 70 positions last year, about half by attrition and the other half with layoffs, from a staff of about 1,500 nationwide.

* The District-based American Iron and Steel Institute, affected by the decline of the steel industry, has had a small decrease in staff and has made recent economies by putting out its publication less frequently and spending less on its annual meeting, a spokesman said.

"To get a job in an association now, a person has to be very innovative," said Vicki Satern, president of Association Personnel, an employment agency for associations. "The middle level has really dropped out."

Not all associations have suffered, however, and the electronics and computer associations continue to be strong groups, according to association experts. Associations representing senior citizens say they are holding their own, largely because the population is getting proportionately older and the associations' membership continues to grow.

The Washington area still has the largest number of trade association headquarters of any city, with about 30 percent of about 5,800 organizations nationwide based here, according to the National Trade and Professional Association Handbook. New York City has had a steady erosion as organizations have come here, and now is second with 19 percent. Chicago is third.

And associations continue to relocate to the Washington area, though now they go more and more to the Virginia suburbs. In addition, some in the District are moving to the suburbs.

Alexandria particularly has a strong campaign to lure associations, and the District so far has not counteracted it with any plan of its own geared to keeping the associations it has, association officials say.

Lawrence P. Schumake of the D.C. government's economic development office said the city expects the new convention center to attract more associations to the District. The city also is developing a plan to promote an area north of Union Station as office space, and this would be an ideal location for associations that lobby on the Hill, he added.

"Washington has all the advantages. This is the place to be, and the associations know that," Schumake said.

But some believe otherwise. The American Chamber of Commerce Executives and the American Dental Trade Association are moving from the city to Alexandria this week and next, for example.

"We're just the beginning of the snowball" on its way to the Virginia suburbs, said ADTA president Nikolaj Petrovic. The group decided to buy a town house near King Street and Rte. 395 when it realized that its rent in the District would rise from about $9 a square foot to $22 when its long-term lease expired.

Since his group announced its move, about 20 association directors have asked him about the decision and for advice on moving, Petrovic said.

"The myth is gone that you have to have a Washington, D.C., address on your letterhead."